How Can Forex traders Use Cross Currency Pairs to Have Better Trades

I have briefly introduced what cross currency pairs are and why they present more opportunities for Forex traders to make pips in my previous article; while they can also help traders make better decisions when trading Forex; what does it mean

Let’s say that if a Forex trader sees buy signals in both the currency pairs EUR/USD and AUD/USD, trading which one can bring him make more pips?? Well, when things like this happen, Forex traders can look at the EUR/AUD cross currency pairs on the Forex chart. If the EUR/AUD is trending upwards, it indicates that the EUR is relative stronger than the AUD at this moment. Likewise, a downtrend means that the EUR is relative weaker than the other. That is to say, EUR/USD is the better trade instead of AUD/USD according to EUR’s relative strength against the AUD, and it can bring them more pips.

Traders, I believe the main reason that you participate in the Forex market is you want to make crazy pips, isn’t it? So when you are facing different major pairs and are confused which one to take, why don’t you just do this relative strength analysis?

Forex analysis-Is S & P Warning a Catastrophe for the Euros

To be honest, I am not a bit surprised when hearing that credit rating agency-Standard & Poor’s (S & P) has put 15 countries using the Euro currency on a negative credit watch. Moreover, I think the decision should have been made earlier! Why? Just look at the long battle of EU crisis, the ineffective responses from European officials. So I don’t doubt why the euro has dropped 10% in the Forex market over the last 3 months; I am just wondering when Forex traders will recollect their confidence in the EU currency!

Europe’s debt crisis has dragged on for nearly two years and has only been intensified by the day as leaders fail, time and time again, to deliver a credible solution. So disappointing, isn’t it?! For what’s worse, the crisis deteriorated recently as the downgraded credit rating of Greece. On Monday, the S & P even announced that it would decide within 90 days whether to cut the AAA credit rating for the bailout agency by one or two notches after determining whether the credit standing of any of the individual countries should be trimmed.

The truth is, if only the Europe did not wipe through the debt crisis, the euro were to collapse; it may possibly come with bank failure, a deeper European crisis and even overall wealth losses…god, such terrifying, I can hardly imagine what a catastrophe it will be for Euros! Well on the contrary, if only it happened, it is good news for the Forex traders to welcome a new trend.

However, as serious as the warning S&P gives to EU, it is more like pressure for the European countries. It’s high time for European countries to temporarily put off their individual interest; no matter it is France or Germany. Neither can benefit a lot from a collapsed European union.

I don’t predict. I use my rational. This long lasting battle is about to end. No one knows exactly when though. Keep a close watch for the latest Forex news released, Forex traders. A bearish EUR/USD may not take the trend so soon. What do you guys think?

Yielding Currencies Leaning Towards Positive Surprise?

After mentioning about a surprise drop in the US unemployment rate, and seeing strong nonfarm payroll (NFP) figures, you would expect that high-yielding currencies would be pushed to new highs. If so, why didn’t we see a huge rally yet? Here are reasons.

First, let us see what we can get from the Current Employment Statistics. It represents the NFP headline figure for November at 120,000, which is a reflection of the 20,000 slip in public sector and the 140,000 increase in private sector. What does it mean? Some economists’ explain that the rise in the private sector is related to temporary jobs in the retail industry. Not only that, the increase in private sector jobs is still below this year’s average monthly rise at 156,000. We surely can’t forget that the unemployment rate sharply dropped to the lowest 8.6% since March 2009.

Furthermore, more than a few Forex traders are considered to take profits prior to the release of potential market-moving economy financial reports . The traders not only get hold of the latest interest rate decisions from the ECB, but also have closer watch to other major reports. The Forex investors expect central banks from commodity-producing nations to remain their rates stable. Meanwhile, the ECB is expected to cut its rate to enhance economic growth.

How to Choose the Most Suitable One?

If you are thinking of doing Forex trading then you should be equipped with the right platform to help you get maximum returns. The best Forex trading platforms for trading are usually the ones that are carefully selected among the bunch of other platforms in the market today.

Before you start investing on one, try to use this steps that will help you choose the best Forex trading platform for you:

1. Search online and look for a variety of Forex platforms. Look carefully at their features and see if this is
There may be something help you a lot in trading foreign currencies. The reports it can generate should also be part of your considerations.

2. If they seem a little too good to be true, then they probably are. The best thing for you to do is to double check reviews and website features in order to find out more about this particular trading software.

3. Check out forums for user recommendations and reviews. The people that participate in this forum can help you by suggesting some good systems that you can use when you trade for foreign exchange.

4. Cost should also be considered when searching for the right Forex platform.The cost should be justified by its features and will certainly make for a worthy investment.

Choosing a Forex trading system could either make you or brake you in the foreign exchange world. So be careful in selecting the best trading system for you so you can really get the returns you want.

How to Choose the Best Automated Forex Trading Software?

Automated Forex trading software can trade in all of the popular currency pairs and also can make trades based on mathematical models. The automated Forex trading software has a demo mode and can be easily tested by using demo accounts before taking them into live trading. When choosing the best automated Forex trading software, traders should consider some certain features.

The best automated Forex trading software should have the capability of analyzing the market and offer traders an edge on their trades. Furthermore, an integrated system of money management is necessary for traders to make the decision. The trading software should leave traders’ positions open and know precisely when to close the deal.

In addition, the automated Forex trading software has to allow traders work withForex demo accounts to get them know about how the Forex market works. Before starting using the automated Forex trading software, traders are not required to have any Forex trading experience in the Forex market. However, it is still good to get familiar with a Forex course, particularly learning from Forex education before taking yourself into live trading.

wo Pitfalls to Avoid When Trading Forex

Forex traders should especially understand three main pitfalls in Forex trading. There are virtually three primary pitfalls that can make Forex traders lose their money. If traders can avoid these pitfalls in Forex trading, it is not difficult for them to make money in the Forex market. Here are the three pitfalls that traders must avoid.

Pitfall No.1: To be objective. Forex traders should be objective rather than subjective in Forex trading. Many traders spend too much time learning about the subjective indicators and methods, such as moving average, charts, cycle and so on. Though these methods and Forex indicators are important in a way, they can be best at their use if they do not make traders be too subjective in Forex trading.

Pitfall No.2: Follow the trend. It is not a bad thing to be different in Forex trading. When you realize that many traders have made loss in a certain trend, you can actually take the opposition to make the profits. Many traders are usually right in forecasting the market movement. However, they can stop losing money because they do not have proper money management and enough discipline. Many traders keep patient to get the tops and bottoms without paying attention on the trend itself. Traders must avoid this dangerous pitfall.

How to Use Bollinger bands in Forex Range Trading?

I mentioned in my previous article that the height of the range is significant. A 20 pips height of the range is not worth trading, since the potential risk should be higher than the potential profit. While, of course, a 200-pip can offer good opportunity worth trading.

Let’s get to the point and talk about how to actually apply this Forex range trading strategy for some pips.

Range, if using technical analysis, is determined by the resistance and support levels. Ways to determine support and resistance levels vary. Despite the traditional approach of drawing lines according to historical lows and historical highs, dynamic approach is also gaining popularity. Bollinger bands can measure support and resistance dynamically and is therefore widely used by Range Traders.

In trading ranges where upper and lower bounds cannot be precisely defined, Bollinger Bands is very useful. With the use of Bollinger Bands, however, a range trader should also monitor the slope of the
simple moving average running through the middle of the Bands to
ensure that it is indeed flat or near – flat. That’s to ensure that a horizontal range is in place.

Besides the dynamic range identification, Forex indicators like Stochstic and RSI can also be used to identify ranging opportunities. Stay with to figure out how to use oscillators to identify the Ranges.